Israel moves decisively to protect consumers, challenge monopolies, and prioritize citizens over entrenched commercial interests.
Finance Minister Bezalel Smotrich on Tuesday signed an order raising Israel’s VAT exemption limit on overseas purchases from $75 to $150, a move designed to directly ease pressure on household budgets and inject real competition into the Israeli market.
The reform is aimed at narrowing the long-criticized gap between international prices and inflated domestic retail costs. By allowing Israelis to import more goods tax-free, the government hopes to force dominant local monopolies to lower prices and compete fairly. “It could be cheaper here,” Smotrich said, stressing that consumers—not protected cartels—must come first.
While small business groups staged protests outside the Ministry of Finance, officials rejected claims of unfairness, arguing that monopolistic pricing—not consumer choice—is the real threat to local commerce. Retail lobbies are expected to challenge the order in Israel’s Supreme Court, underscoring resistance from entrenched interests long shielded from global competition.
The Finance Ministry maintains the policy will ultimately benefit both consumers and efficient businesses by correcting price distortions and restoring market balance. Supporters say the move reflects Israel’s willingness to confront internal economic inefficiencies decisively—rather than burden families already strained by regional instability and global inflation.
